Trinseo S.A. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a vital strategic planning tool that can be used by Trinseo S.A. managers to do a situational analysis of the organization . It is an important technique to evalauate the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Trinseo S.A. is facing in its current business environment.

The Trinseo S.A. is one of the leading organizatations in its industry. Trinseo S.A. maintains its dominant position in market by carefully analyzing and reviewing the SWOT analysis. SWOT analysis a highly interactive process and requires effective coordination among various departments within the company such as – marketing, finance, operations, management information systems and strategic planning.

The SWOT Analysis framework facilitates an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Trinseo S.A. to develop four types of strategies:

SO (strengths-opportunities) Strategies

WO (weaknesses-opportunities) Strategies

ST (strengths-threats) Strategies

WT (weaknesses-threats) Strategies

SWOT Matrix Strategies Objective

The central purpose of SWOT matrix is to identify the strategies that a firm can use to exploit external opportunities, counter threats, and build on & protect Trinseo S.A. strengths, and eradicate its weaknesses.

Step by Step Guide to Trinseo S.A. SWOT Analysis

Strengths of Trinseo S.A. – Internal Strategic Factors

As one of the leading firms in its industry, Trinseo S.A. has numerous strengths that enable it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of Trinseo S.A. are –

Highly skilled workforce through successful training and learning programs. Trinseo S.A. is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.

Successful track record of developing new products – product innovation.

Strong distribution network – Over the years Trinseo S.A. has built a reliable distribution network that can reach majority of its potential market.

Strong Free Cash Flow – Trinseo S.A. has strong free cash flows that provide resources in the hand of the company to expand into new projects.

Highly successful at Go To Market strategies for its products.

High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.

Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.

Automation of activities brought consistency of quality to Trinseo S.A. products and has enabled the company to scale up and scale down based on the demand conditions in the market.

Weakness of Trinseo S.A. – Internal Strategic Factors

Weakness are the areas where Trinseo S.A. can improve upon. Strategy is about making choices and weakness are the areas where a company can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

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High attrition rate in work force – compare to other organizations in the industry Trinseo S.A. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.

The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. Trinseo S.A. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.

Financial planning is not done properly and efficiently. The current asset ratio and liquid asset ratios suggest that the company can use the cash more efficiently than what it is doing at present.

Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Trinseo S.A. needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.

Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.

Not highly successful at integrating firms with different work culture. As mentioned earlier even though Trinseo S.A. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.

The profitability ratio and Net Contribution % of Trinseo S.A. are below the industry average.

Opportunities for Trinseo S.A. – External Strategic Factors

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Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Trinseo S.A. to capture new customers and increase its market share.

Government green drive also opens an opportunity for procurement of Trinseo S.A. products by the state as well as federal government contractors.

The market development will lead to dilution of competitor’s advantage and enable Trinseo S.A. to increase its competitiveness compare to the other competitors.

Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Trinseo S.A..

Organization’s core competencies can be a success in similar other products field. A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines.

Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Trinseo S.A.’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share.

New environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for Trinseo S.A. to drive home its advantage in new technology and gain market share in the new product category.

The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Trinseo S.A. to increase its profitability.

Threats Trinseo S.A. Facing - External Strategic Factors

Intense competition – Stable profitability has increased the number of players in the industry over last two years which has put downward pressure on not only profitability but also on overall sales.

Imitation of the counterfeit and low quality product is also a threat to Trinseo S.A.’s product especially in the emerging markets and low income markets.

The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.

As the company is operating in numerous countries it is exposed to currency fluctuations especially given the volatile political climate in number of markets across the world.

Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.

Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.

Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.

Liability laws in different countries are different and Trinseo S.A. may be exposed to various liability claims given change in policies in those markets.

Limitations of SWOT Analysis for Trinseo S.A.

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the
major limitations of SWOT analysis
. For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.

SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.

The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Trinseo S.A.

SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.

SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

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Weighted SWOT Analysis of Trinseo S.A.

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Trinseo S.A. managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of Trinseo S.A.

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.